2007 Issue 3

“IF YOU CAN KEEP IT”
CREATING AND KEEPING GOOD LEADERSHIP
By Matthew N. Perlstein, Esq.

An association can’t buy good leadership.  The unit owners have to demand it, and the association’s current leaders have to identify and train their successors as early as possible.

Not long ago, the new board of a 25-year old condominium asked for our assistance.  The association was facing a number of problems common to communities with older buildings.  Many of the roofs had reached the end of their useful lives and were leaking.  The prior board had replaced a few roofs, but the workmanship was questionable.  Also, the paving was due to be replaced shortly and the town had condemned the wading pool.  An even more immediate problem was that the complex had been built using aluminum wiring, which created a fire hazard.  Although the old board had looked into the matter several times over the years, nothing had been done.  As a result of the wiring problem and the leaking roofs, the association’s insurance carrier had refused to renew its policy, forcing the association to obtain insurance from an excess line carrier at significantly higher rates. 

The association could not find enough volunteers to fill all of the seats on the board.  However, a few people did step forward and volunteered to serve as directors.  These new directors set to work with enthusiasm and persistence.  They examined all of the association’s contracts and replaced a number of contractors.  They hired a new manager.  They hired consultants to help the association prepare a long-term facility maintenance and replacement plan.  They also developed a plan to correct the wiring problems and replace the leaking roofs.

The association obtained a bank loan to pay for the roofs and wiring.  By addressing these issues, the association realized enormous savings in insurance premiums and other expenses. With these savings, the association was able to cover the monthly loan payments without increasing the common charges.  The association even planned its first neighborhood holiday party.

As the association’s attorneys, we were asked to attend the owners’s meeting called to obtain the approvals necessary to obtain the loan and to approve a special assessment for building up the reserves for future repairs.  At the meeting, the consultants gave a presentation of the long-range plan.  The president and treasurer of the association discussed the changes in the association’s finances, the proposed renovations and the loan. 

After these presentations, the association then opened the meeting for comments and questions.  We have attended many association meetings like this one and so we were familiar with most of the questions and comments raised by unit owners.  However, there was one comment, repeated by several unit owners, that was new to us.  After thanking the board for its accomplishments, several of the unit owners asked how the association could ensure that future boards were as conscientious and responsible as the current one, continuing plans for the future and paying careful attention to finances.

We responded that the unit owners themselves are the only ones who can guarantee the level of leadership in the future, by electing capable directors and holding them responsible for the operation of the association.  As Benjamin Franklin said when asked about the form of the new government created by the new American Constitution, “A republic, if you can keep it.”

Our associations are, among other things, small democracies.  Democracy is not a spectator sport.  Unit owners cannot contract for good government.  They must participate by being informed, by voting, and, from time to time, by participating in the leadership and the stewardship of their community.  There are, however, a number of things that any association can do to ensure quality leadership in the times to come:

• Encourage the flow of information.  Homeowners pay more attention to what the association does if they are kept informed.  Boards will make better decisions if they are aware of the homeowners’ concerns.  Although the unit owners shouldstay involved regardless of what the board does, the board is primarily responsible for keeping the information flowing.

• Keep the decision making process as open as possible.  Closed-door meetings foster suspicion.

• Identify and encourage new leaders.  Nobody wants to be an association leader forever.  Given enough time, even the best leaders may need and certainly deserve a break.  Although not everyone has the ability to be an effective association leader, most people can take their share of responsibility if given an opportunity to learn by working with experienced leaders.  The current leadership should encourage unit owners to become involved in the activities of the association.  If your association is large enough to have committees, encourage interested homeowners to serve on committees, where they can work with more experienced association leaders.  If your community has no committees, you can still encourage homeowners to take on particular projects or even serve on the board.

• Keep a record of checklists and procedures.  Memorialize what you learn.  For example, prepare checklists for calling and holding meetings.  Prepare calendars of projects and deadlines for the budget process.  If you prepare a list of questions for interviewing contractors, save the checklist for the next time you need to hire a contractor.  Keep all of this material in some permanent notebooks so that future leaders can benefit from what you have learned.

• Develop backups for all leadership positions.  The vice president should assist the president and learn how to do the president’s job.  Create an assistant secretary and an assistant treasurer who can learn these jobs and can step in when needed.  These assistants are also the most likely candidates to take over these positions when the current occupants step down.

• In many professional and civic organizations, the leaders of the organization “walk the chairs.”  This means that the leadership takes a turn holding each of the offices in the organization in turn, ending with the presidency.  By the time a person becomes president, he or she will be familiar with all of the operations of the organization.  While this is not always possible, it is a good practice to follow.  Of course, since the unit owners elect the board, and the board appoints the officers, the unit owners always have the power to change the leadership of the association.  Sometimes this is both necessary and important.  Most of the time, however, the association’s challenge is not changing leadership, but finding leadership.

• Educate the present and future leaders.  The Community Associations Institute, known as CAI, is a very useful resource for information.  The Connecticut Chapter of CAI offers various seminars designed to introduce unit owners and association leaders to the structure and operation of condominium and homeowner associations. The Chapter also conducts annual trade shows.  Every association should encourage its officers and directors to attend these programs.  Additionally, CAI offers many useful publications and tapes.  The association should purchase these and establish a library for the use of its officers and directors, as well as other interested association leaders and owners.

• Always remember that association leadership positions are positions of service, not positions of power.  Every homeowner is entitled to good service from the association and has a duty to share in the responsibility of serving his or her community.

• Your association should consider adopting CAI’s “Rights and Responsibilities for Better Communities.”  These principles strike a thoughtful balance between the needs and concerns of homeowners and the challenges facing association leaders.

• Quality leadership is a must for every community association.  Finding and developing new leaders is one of the best ways any association can provide for the future of its community.

Please contact us for more information regarding association leadership or for information regarding CAI.

Matt Perlstein, Esq. is a partner with the law firm of Perlstein, Sanlder & McCracken, LLC.  He is a founding member of CAI-CT, and has served our organization in many capacities including President and Co-Chair of the Program Committee, etc.